The Economist - UK (2022-04-30)

36 United States TheEconomistApril30th 2022

Hawaii

Pacific pain from Ukraine

B

arely visible a mile off the south­

western tip of Oahu, an oil tanker floats

lazily  in  the  gentle  surf.  Squinting  from

shore,  an  eagle­eyed  observer  can  spot  a

small yellow metal platform in its shadow,

hooked like an intravenous bag to the ves­

sel  by  a  series  of  tubes.  It  is  here  that  the

tanker’s  contents  are  piped  undersea  and

onto shore, and into the sprawling Kapolei

complex. Operated by Par Hawaii, it is the

only  oil  refinery  in  Hawaii,  converting

crude oil into refined products dispatched

to  the  other  islands  to  power  cars,  homes

and  planes.  It  is  the  beating  heart  of  the

state’s oil­dependent economy.

With oil prices pushed up by the war in

Ukraine, and an American ban on imports

from  Russia,  Hawaii’s  reliance  on  oil  is

putting  pressure  on  its  economy.  Despite

improving  energy  efficiency  and  progress

with  renewables,  big  obstacles  remain.  In

the  meantime,  Hawaiians  are  not  finding

much relief from the energy crunch.

Among the 50 states, Hawaii is the most

reliant on oil, which accounts for over 85%

of  its  energy  needs  (see  chart),  compared

with 56% for the second­most dependent,

Vermont. As in the rest of the country, pet­

rol  powers  ground  transport.  But  most

states  use  almost  no  oil  to  produce  elec­

tricity, whereas it supplies more than 66%

of Hawaii’s. It is also critical for the jet fuel

that Hawaiians rely on to travel from island

to  island,  and  to  the  American  mainland.

When oil prices climbed above $100 a bar­

rel  in  the  2000s,  Hawaii  was  among  the

hardest­hit states. The same is true today.

Most  of  Hawaii’s  oil  is  imported—usu­

allyabouta thirdofitfromRussia.ParHa­

waiiannouncedonMarch4th(fourdays

beforePresidentJoeBidendeclareda na­

tionalban)thatitwouldceaseimporting

thestufffromRussia,andwouldfindalter­

native sources from North and South

America.“Wedonotanticipatethisdeci­

sionwillhavea meaningfulimpactonthe

pricespaidbyHawaiiconsumers,”saysEr­

icWright,thefirm’spresident.

Targetpractice

Itmaystillbepainful.Thestatehasthe

second­highestpetrolpricesinAmerica,

behind onlyCalifornia, and thehighest

electricity prices. Hawaiian Electric, its

majorutility,warnedcustomersinMarch

thatelectricitybillscouldriseby10%on

Oahu,20%onMauiandHawaiiIsland,and

25%onthepoorerislandofMolokai.

Thisrelianceonoilhaslongmotivated

efforts at diversification. A state law

passedin 2015 mandates100%cleanener­

gyinelectricityby2045,thefirstsuchgoal

setbyanAmericanstate,buildingontar­

getsestablishedin2007.“Becauseofthe

actionswehavetakensince2007,things

arenotnearlyasbadastheymighthave

been,”saysScottGlenn, thestate’schief

energyofficer.Hawaiiisblessedwithregu­

larsunshineandwinds,aswellasthepo­

tentialforgeothermalenergyonMauiand

HawaiiIsland.TheAlohaStatenowhasthe

second­highestnumber ofelectric vehi­

clesperheadinAmerica,andithasbyfar

thegreatestpenetrationofrooftopsolarin

thecountry.

Weaningitselfoffoil,however,isnot

simple.EachofHawaii’sinhabitedislands

hasitsownelectricgrid,ineffectgiving

thestatesixdifferentenergysystems.Kau­

aisources almost70% ofits electricity

fromrenewableenergy,thehighestshare

ofanyisland,thankstoitsamplelandfor

largeprojects.HawaiiIslandcantapgeo­

thermalfor30%ofitselectricity,thanksto

itsvolcanicactivity.ThepopulousOahu,

ontheotherhand,drawsjustone­thirdof

its electricity from renewable energy,

muchofit throughrooftopsolar.

An integrated grid would make the

state’swholesystemmoreefficientandre­

silient.ButHawaiiisalsohandicappedby

politicalconstraints.Its constitution re­

quiresthatanynuclearprojectbesubject

toa two­thirdsvoteinbothchambersof

thelegislature,anobstaclemanylikento

aneffectiveban.Ruleswrittentoprotect

Hawaii’snaturalenvironmenthinderre­

newable­energy projects, lest wind tur­

bines interfere with migratory birds or

hydropowerdisplacea rarespecies.

Fightsoverlanduse,meanwhile,piten­

vironmentalists and local communities

againstoneanother.Theplanetisin“amo­

mentofextremetrade­offs,andthediscus­

sionoverlanduseisnoexception,”says

MelissaMiyashiro,theexecutivedirector

oftheBluePlanetFoundation,a localadvo­

cacyorganisation.

Insomeways,Hawaiiiswellplacedto

weatherthestorminglobaloilmarkets.

Hawaiiansareusedtopayinga premium.

Thestatehasa bipartisantraditionofenvi­

ronmentalism—inthemid­2000sitwasa

Republican governor, Linda Lingle, who

helpedputHawaiionthepathtorenew­

ableenergy.Hawaiiwasthefirststatetoset

a net­negativeemissionstarget.

Butachievingtheseambitionswillre­

quirehardchoicesandheavyinvestment.

Thecurrentgovernor,DavidIge,hasreject­

edcallsfora stateofemergencytoacceler­

atetheconstructionofrenewable­energy

projects,claimingthatit wouldnotaddca­

pacitysoonenoughtomakea difference.

TheKapoleirefinery,andhighenergypric­

es,maynotbegoingawaysoon.n

H ONOLULU

The Aloha State is hit especially hard by theoilshock

Oiloha

Energy consumption by source, 2019, % of total

Source:EIA *Wind, solar and biofuels

United States

Nuclear

Coal

Renewables*

Natural gas

32.1 11.3 11.3 8.4

Oil

36.8

Hawaii

9.7

4.6

8

.6